UPDATE 2-European stocks fall in holiday lull, set for best year in a decade

(For a live blog on European stocks, type LIVE/ in an Eikon
news window)
* German shares fall 0.6%, while Spanish stocks ease 0.9%
* EssilorLuxottica logs biggest daily drop in four weeks
* European shares still set for largest annual rise since
2009

(Updates to close)
By Sagarika Jaisinghani and Lisa Pauline Mattackal
Dec 30 (Reuters) - European shares posted their steepest
one-day loss in four weeks on Monday as investors cashed in
gains from a record run higher that has put the benchmark index
on course for its best year since the global financial crisis.
In a holiday-shortened week, the pan-European STOXX 600
index .STOXX closed 0.9% lower in volumes that were less than
a third of the average so far this month. The index is up 24% so
far this year, on track for its biggest annual rise since 2009.
A fall on Wall Street saw regional bourses steepen losses as
the decline spread to all sectors. .N MKTS/GLOB
"Volumes are... below average and people are doing as little
as possible - a little bit of profit taking and a little bit of
window dressing as it's the year-end," said Mirabaud sales
trader Mark Taylor.
Industrials and other defensive sectors such as healthcare
led losses, while banks, one of the major underperformers for
the year, lost the least.
Frankfurt shares .GDAXI fell more than half a percent,
while those in France .FCHI , Italy .FTMIB and Spain .IBEX
dropped around 1% each. London-listed shares .FTSE dipped
0.8%.
White House trade adviser Peter Navarro's comments on Monday
that the U.S.-China Phase 1 trade deal would likely be signed
next week failed to cheer investors as they await confirmation
from U.S. Trade Representative Robert Lighthizer or President
Donald Trump. After somewhat choppy trading earlier in the year, European
equities have enjoyed a strong December as investors received
clarity on two of the major risks to global economic growth -
the U.S.-China trade war and Brexit.
Fairly upbeat economic data from around the world has also
eased recession fears, with latest figures showing Spain's
economy growing 0.4% in the third quarter, in line with a flash
estimate. In corporate news, spectacles group EssilorLuxottica
ESLX.PA shed 3.1%, its largest daily drop in four weeks, after
saying it had discovered fraudulent activity at a plant in
Thailand that was expected to cost it 190 million euros ($213
million). Among other individual stocks, Swiss lender Cembra CMBN.S
fell 3.8%, the most on the STOXX 600 and its biggest one-day
fall in more than two months, after gaining nearly 3% over the
last three sessions.
Looking ahead to 2020, David Madden, a market analyst at CMC
Markets, sees the travel sector being held back, with rising
fuel costs being one of the factors.